Need Accounting help with rex corporation

timer Asked: Jan 10th, 2016
account_balance_wallet $10

Question description

Rex Corporation, a U.S. firm with a calendar accounting year, agreed to buy a specially made truck from a Japanese firm for delivery on February 28, 2017 with payment due on that date. On the same date the agreement was signed, November 1, 2016, a forward contract due on February 28, 2017, was also signed to purchase 1,000,000 yen, the contract price of the truck. Exchange rates were as follows:


Spot Rate

Forward Rate










Discount rate = 8%


Prepare the journal entries needed to properly reflect the purchase and forward contract through the end of the fiscal year.

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